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CAPEVIN HOLDINGS LIMITED
("Capevin Holdings" or "the Company" or "the Group")
(Incorporated in the Republic of South Africa)
Registration number 1997/020857/06
JSE Share code CVH
ISIN ZAE000167714
UNAUDITED INTERIM RESULTS
for the six months ended
31 December 2015
and
CASH DIVIDEND DECLARATION
- Normalised headline earnings per share +17.2% to 35.5 cents
- Headline earnings per share +17.9% to 35.5 cents
- Intrinsic value per share at 31 December 2015,
compared to 30 June 2015 -1.0% to R11.01
- Interim dividend per share 11.40 cents
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
31 December 30 June
2015 2014 2015
R'000 R'000 R'000
ASSETS
Non-current assets 2 968 953 2 465 137 2 559 147
Investment in joint venture 2 967 153 2 463 337 2 557 347
Available-for-sale asset 1 800 1 800 1 800
Current assets 15 489 7 710 4 842
Investment in money market fund - 4 451 -
Cash and cash equivalents 15 489 3 259 4 842
Total assets 2 984 442 2 472 847 2 563 989
EQUITY AND LIABILITIES
Equity
Ordinary shareholders' interest 2 974 251 2 468 199 2 546 060
Non-current liabilities
Deferred taxation 335 335 335
Current liabilities 9 856 4 313 17 594
Trade payables 86 203 318
Unclaimed dividends 9 733 4 050 17 239
Current income tax liability 37 60 37
Total equity and liabilities 2 984 442 2 472 847 2 563 989
Net asset value per share (cents) 337.9 280.4 289.3
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Six months ended Year ended
31 December 30 June
2015 2014 2015
R'000 R'000 R'000
Share of profit of joint venture 311 944 265 981 385 899
Loss on dilution of interest in joint venture (2 184) (1 881) (246)
Investment income 569 394 1 025
Unclaimed dividends forfeited 600 - 1 106
Administrative expenses (964) (996) (2 280)
Profit before taxation 309 965 263 498 385 504
Taxation (157) (108) (284)
Profit for the period 309 808 263 390 385 220
Other comprehensive income 210 354 4 950 70 113
Items that may be reclassified subsequently to profit or loss:
Share of other comprehensive income of joint venture
Fair value adjustment ' available-for-sale asset 5 245 1 303 1 529
Currency translation differences 193 553 801 48 215
Reclassified to profit or loss (634) (162) (361)
Items that will not be reclassified to profit or loss:
Share of joint venture's remeasurements of post-
employment benefits 7 854 (2 562) 16 332
Other equity movements of joint venture 4 336 5 570 4 398
Total comprehensive income for the period 520 162 268 340 455 333
Profit for the year attributable to:
Owners of the parent 309 808 263 390 385 220
Total comprehensive income attributable to:
Owners of the parent 520 162 268 340 455 333
HEADLINE EARNINGS RECONCILIATION
Six months ended Year ended
31 December 30 June
2015 2014 2015
R'000 R'000 R'000
Earnings attributable to ordinary shareholders 309 808 263 390 385 220
Headline earnings adjustable items
Share of adjustments of joint venture before taxation 103 (951) (849)
Tax on share of adjustments of joint venture (19) 176 157
Loss on dilution of interest in joint venture 2 184 1 881 246
Headline earnings 312 076 264 496 384 774
Remeasurement of contingent consideration - 2 388 2 388
Normalised headline earnings# 312 076 266 884 387 162
Earnings per share (cents)
- Basic 35.2 29.9 43.8
- Diluted 35.1 29.8 43.6
Headline earnings per share (cents)
- Basic 35.5 30.1 43.7
- Diluted 35.3 29.9 43.5
Normalised headline earnings per share (cents)
- Basic 35.5 30.3 44.0
- Diluted 35.3 30.2 43.8
Number of shares (thousands)
- In issue 880 103 880 103 880 103
- Weighted average 880 103 880 103 880 103
# Normalised headline earnings excludes the Company's share of Distell Group Limited's remeasurement and reversal of the
contingent consideration of the acquisition of Burn Stewart Distillers Limited during the 2015 financial year.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Six months ended Year ended
31 December 30 June
2015 2014 2015
R'000 R'000 R'000
Ordinary shareholders' equity at the beginning of the
period 2 546 060 2 305 472 2 305 472
Total comprehensive income 520 162 268 340 455 333
Dividends paid (91 971) (105 613) (214 745)
Ordinary shareholders' equity at the end of the period 2 974 251 2 468 199 2 546 060
Dividend per share (cents)
- Interim 11.40 12.40 12.40
- Final 10.45
CONSOLIDATED STATEMENT OF CASH FLOWS
Six months ended Year ended
31 December 30 June
2015 2014 2015
R'000 R'000 R'000
Cash flows from operating activities
Dividends received 110 318 107 383 200 088
Dividends paid (91 971) (105 613) (214 745)
Interest received 559 383 1 015
Administrative expenses (964) (996) (2 280)
Taxation paid (157) (79) (278)
Increase/(decrease) in trade and other payables and
unclaimed dividends (7 138) 6 14 416
10 647 1 084 (1 784)
Cash flows from investing activities
Investment in money market fund - (137) 4 314
Net increase in cash and cash equivalents 10 647 947 2 530
Cash and cash equivalents at the beginning of the
period 4 842 2 312 2 312
Cash and cash equivalents at the end of the period 15 489 3 259 4 842
ADDITIONAL INFORMATION
Fair value remeasurements
The following methods and assumptions are used to determine the fair value of each class of financial
instruments:
- Financial instruments available-for-sale and investment in money market fund: Fair value is based on
quoted market prices or, in the case of unlisted instruments, appropriate valuation methodologies, being the
actual net asset value of the investment.
Financial instruments measured at fair value, are disclosed by level of the following fair value hierarchy:
Level 1 ' Quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2 ' Inputs (other than quoted prices included within level 1) that are observable for the asset or liability,
either directly (as prices) or indirectly (derived from prices); and
Level 3 ' Inputs for the asset or liability that are not based on observable market data (unobservable inputs).
The following tables illustrate the fair values of financial assets and liabilities that are measured at fair value,
by hierarchy level:
Level 1 Level 2 Level 3 Total
31 December 2015 R'000 R'000 R'000 R'000
Assets
Available-for-sale asset - - 1 800 1 800
- - 1 800 1 800
31 December 2014
Assets
Available-for-sale asset - - 1 800 1 800
Investment in money market fund 4 451 - - 4 451
4 451 - 1 800 6 251
30 June 2015
Assets
Available-for-sale asset - - 1 800 1 800
- - 1 800 1 800
NOTES TO THE INTERIM FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION AND ACCOUNTING POLICIES
The consolidated interim financial statements are prepared in accordance with International Financial
Reporting Standards (IFRS), IAS 34 Interim Financial Reporting, the SAICA Financial Reporting
Guides as issued by the Accounting Practices Committee and Financial Pronouncements as issued by
the Financial Reporting Standards Council and the requirements of the Companies Act of South Africa,
as well as the Listings Requirements of the JSE Limited.
The directors are responsible for the preparation of the interim financial statements, prepared under
supervision of the financial director, Mr P R Louw CA(SA), an employee of the Company's appointed
manager, Remgro Management Services Limited. The interim financial statements have not been
audited or reviewed by the Company's auditors.
The accounting policies applied in the preparation of these interim financial statements are in terms of
IFRS and are consistent with those applied in the previous consolidated annual financial statements.
2. GROUP STRUCTURE
The sole investment of Capevin Holdings is an effective interest of 26.78% (31 December 2014:
26.84% and 30 June 2015: 26.82%) in the issued share capital of Distell Group Limited (Distell), held
via its 50% interest in Remgro-Capevin Investments Proprietary Limited (Remgro-Capevin
Investments).
3. RELATED PARTY INFORMATION
During the period Capevin Holdings received dividends from Remgro-Capevin Investments of
R110.3 million (31 December 2014: R107.4 million; 30 June 2015: R200.1 million). Capevin
Holdings also paid administrative fees of R0.5 million (31 December 2014: R0.5 million;
30 June 2015: R0.9 million) to Remgro Management Services Limited (a subsidiary of an investor with
significant influence over the Group).
No directors' emoluments were paid during the six months ended 31 December 2015
(31 December 2014: R nil; 30 June 2015: R0.1 million).
4. SEGMENT REPORT
Capevin Holdings is an investment holding company, with its sole investment being an effective
interest in Distell. The directors have not identified any other segment to report on.
COMMENTARY
FINANCIAL RESULTS
For the six months ended 31 December 2015 Distell's revenue increased by 11.2% to R12.2 billion on a sales
volume increase of 7.7%. Reported headline earnings for the six months ended 31 December 2015 increased
by 17.8% to R1 163.6 million, while headline earnings per share increased by 17.7% to 532.5 cents. On a
normalised basis, Distell's headline earnings increased by 16.8%. The financial results for the period, supported
by strong overall revenue growth and efficiency improvements across the business, also benefitted from a
substantially weaker rand against the major currencies in which Distell trades.
Capevin Holdings' headline earnings for the six months ended 31 December 2015 consequently increased by
18.0% to R312.1 million (2014: R264.5 million), while headline earnings per share increased by 17.9% to
35.5 cents (2014: 30.1 cents). On a normalised basis, headline earnings increased by 16.9% to R312.1 million
(2014: R266.9 million), while normalised headline earnings per share increased by 17.2% to 35.5 cents
(2014: 30.3 cents).
Capevin Holdings' intrinsic value per share decreased by 1.0% from R11.12 on 30 June 2015 to R11.01 on
31 December 2015, based on Distell's last traded share price of R164.99 at that date (excluding capital gains
tax), while the discount to intrinsic value has narrowed from 14.6% to 12.3%. On 19 February 2016, Distell's
share price increased to R166.50, while Capevin Holdings' decreased to R9.17 (31 December 2015: R9.65) and
the discount to its intrinsic value per share increased to 17.4%.
PROSPECTS
Distell's board believes that the macroeconomic outlook for the remainder of the financial year will continue
to be challenging amid volatile trading conditions in many of the Group's key markets. While a modest recovery
is expected in the developed world, emerging economies continue to show slow growth. In South Africa,
consumer spending will be adversely impacted by higher inflation, the hike in interest rates and higher food
prices. Tougher trading conditions are therefore expected in the second half of the financial year. Nevertheless,
Distell continues to pursue and invest in its long-term strategy to grow shareholder value, but is reviewing the
sequencing and the pace of investment due to the sharp slowdown of growth in certain markets. The Group
remains well-positioned to take early advantage of any improvements in the economic conditions of the markets
where it operates given its versatile portfolio of strong, appealing and diverse brands, the capacity to trade
across a spectrum of markets at a range of price points and the security of its financial position.
Refer to www.distell.co.za for Distell's comprehensive interim results.
DIRECTORATE
There was no change in the Company's directorate during the period under review.
DECLARATION OF CASH DIVIDEND
In terms of the dividend policy of Capevin Holdings, dividends received from its indirect interest in Distell,
after providing for administrative expenses, will be distributed to shareholders. The directors have consequently
resolved to approve and declare an interim gross cash dividend (dividend number 23) of 11.40 cents
(2014: 12.40 cents) per share for the six months ended 31 December 2015. The reason for the smaller dividend
compared to that for the six months ended 31 December 2014 is due to a portion of cash reserves included in
the dividend for the comparative period. The dividend has been declared from income reserves.
A dividend withholding tax rate of 15% or 1.71 cents per share will be applicable, resulting in a net dividend
of 9.69 cents per share, unless the shareholder concerned is exempt from paying dividend withholding tax or is
entitled to a reduced rate in terms of the applicable double-tax agreement.
The number of issued ordinary shares as at 2 March 2016 is 880 103 265. The Company's income tax number
is 9599/656/71/8.
Dates of importance:
Last day to trade in order to participate in the dividend Friday, 8 April 2016
Shares trade ex dividend Monday, 11 April 2016
Record date Friday, 15 April 2016
Payment date Monday, 18 April 2016
Share certificates may not be dematerialised or rematerialised between Monday, 11 April 2016, and Friday,
15 April 2016, both days inclusive.
In terms of the Company's Memorandum of Incorporation, dividends will only be transferred electronically to
the bank accounts of shareholders, while dividend cheques are no longer issued. In the instance where
shareholders do not provide the Transfer Secretaries with their banking details, the dividend will not be forfeited
but will be marked as "unclaimed" in the share register until the shareholder provides the Transfer Secretaries
with the relevant banking details for payout.
Signed on behalf of the Board of Directors.
Chris Otto Pieter Louw
Chairman Financial Director
Stellenbosch
2 March 2016
DIRECTORATE
Non-executive directors
C A Otto* (Chairman),
A E v Z Botha*, J J Durand, R M Jansen*, E G Matenge-Sebesho*
(*Independent)
Executive director
P R Louw (Financial Director)
CORPORATE INFORMATION
Secretary
Remgro Management Services Limited
Listing
JSE Limited
Sector: Consumer goods ' Food and Beverage ' Beverages ' Distillers & Vintners
Business address and registered office
Millennia Park, 16 Stellentia Avenue, Stellenbosch 7600
(PO Box 456, Stellenbosch 7599)
Transfer Secretaries
Computershare Investor Services Proprietary Limited,
70 Marshall Street, Johannesburg 2001
(PO Box 61051, Marshalltown 2107)
Auditors
PricewaterhouseCoopers Inc.
Stellenbosch
Sponsor
Rand Merchant Bank (A division of FirstRand Bank Limited)
Website
www.capevin.com
Date: 02/03/2016 05:03:00 Supplied by www.sharenet.co.za
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